1. What is the Car Loan Installment Formula?

The car loan installment formula calculates the fixed monthly payment required to repay a car loan over a specified term. It's based on the principal amount, interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the installment formula:

Where:

• \( PMT \) — Monthly payment amount
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps in budgeting and comparing different loan offers. It also shows the total cost of borrowing.

4. Using the Calculator

Tips: Enter the loan amount in MYR, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical car loan term in Malaysia?
A: Most car loans in Malaysia range from 5 to 9 years, with some extending up to 10 years for certain vehicles.

Q2: How does interest rate affect my payment?
A: Higher rates increase both monthly payments and total interest paid. A 1% difference can significantly impact total cost.

Q3: What are common interest rates for car loans in Malaysia?
A: Rates vary by bank and borrower profile, typically ranging from 2.5% to 4.5% per annum for conventional loans.

Q4: Does this include insurance or other fees?
A: No, this calculates principal and interest only. Additional costs like insurance or processing fees are not included.

Q5: Can I calculate for different payment frequencies?
A: This calculator assumes monthly payments. For weekly or bi-weekly payments, the formula would need adjustment.